I have a question, If I were a company and sold $100,000 of merchandise which was a credit sale on a 30 day term (not yet paid), how would this be inserted into a balance sheet and income statement?
What if the sale above consumed $65,000 of inventory? How is this inserted into a balance sheet and income statement?
Please help me understand sale/cost of goods sold/inventory..I don't get it!
2006-06-13 05:24:21 · 5 answers · asked by mrliam77 1 in Business & Finance ➔ Other - Business & Finance
For the sale, the $100,000 would be recorded as sales (credit) in the income statement and accounts receivable (debit) in the balance sheet. When collected in 30 days, the $100,000 would be removed (credited) from receivables and debited to cash.
The inventory would be reduced (credited) by $65,000 on the balance sheet, and cost of sales of $65,000 would be debited on the income statement.
The net result on the income statement would be $35,000 of gross profit
2006-06-13 06:30:04 · answer #1 · answered by just_the_facts_ma'am 6 · 2⤊ 1⤋
This would be inserted as an accounts receivable item, since you still have yet to be paid for it.
(short answer, short on time...hope it helps)
2006-06-15 09:51:32 · answer #2 · answered by edlives 2 · 0⤊ 0⤋
debit accounts receivable / credit sales is the journal entry
2006-06-13 13:19:49 · answer #3 · answered by ishootpix 3 · 0⤊ 0⤋
Im in accounting as well and I dont get that **** either....so you are not alone!!
Wish I could help
2006-06-13 12:29:18 · answer #4 · answered by krazy_red_head_86 2 · 0⤊ 0⤋
If this is a homework problem you can ask in news:alt.accounting
2006-06-13 12:30:51 · answer #5 · answered by Dave 2 · 0⤊ 0⤋